Consumer Protection Act 2007

Introduction

The Consumer Protection Act 2007 (pdf) came into effect in Ireland on 1 May 2007. The Act provided for the establishment of the National Consumer Agency, it put the EU Directive on unfair commercial practices into national law and it made various changes to our consumer laws. It also repealed certain older consumer laws, some of which dated from the 19th century.

The Act has been fully implemented apart from Sections 48 and 49. These Sections deal with the prohibition of credit card surcharges, and surcharges imposed on certain other payment methods. The Government has said that these sections are not compatible with EU law.

The Consumer Protection Act 2007 is quite complex and includes some detailed definitions. The following is a summary of its main provisions:

National Consumer Agency

The National Consumer Agency (NCA) was set up on an interim basis in May 2005 and established on a statutory basis in May 2007. It has a general function of promoting consumer welfare and is responsible for investigating, enforcing and encouraging compliance with consumer law. It has set up a website for consumers called consumerconnect.ie. It has also published a guide to the Consumer Protection Act 2007 (pdf) which can be downloaded from its website.

The NCA took over the functions and powers of the Office of the Director of Consumer Affairs and has even more extensive functions and powers.

Functions of the National Consumer Agency

The main functions of the NCA are:

• To promote and protect the interests and welfare of consumers
• To enforce the relevant consumer law
• To encourage compliance with the relevant law
• To investigate suspected offences under any of the relevant laws
• To refer cases to the Director of Public Prosecutions where appropriate.

In carrying out its functions, the NCA is obliged to engage in various activities and has various powers. These include the power (and the obligation, if requested by the Minister) to advise and make recommendations on any legislation or policy which concerns or is likely to impact on consumer protection and welfare.  The NCA also has the power to make proposals for new legislation.

You can read more about the activities the NCA is obliged to engage in by clicking on the More about this topic tab at the top of this page.

Co-operation agreements with other bodies

The NCA is obliged to enter into agreements with certain organisations to facilitate co-operation, avoid duplication and ensure the NCA is consulted about decisions which affect consumers. The Minister for Enterprise, Trade and Employment sets out which bodies the NCA must co-operate with. Examples of the bodies with whom the NCA is likely to co-operate include the Commission for Energy Regulation (which makes decisions about electricity and gas prices) and Comreg (which regulates the telecommunications and postal industry).

Enforcing consumer legislation 

The NCA has the power to appoint authorised officers in order to enforce consumer legislation. These authorised officers have powers to pursue their investigations. These powers include the right to enter premises, get documentation and other evidence in relation to any trade or business which is being investigated.  They also have the right to be accompanied by the Gardaí, if necessary and apply to the courts for search warrants.

The NCA may exchange relevant information with the Competition Authority, the Gardaí, the Director of Corporate Enforcement, the Revenue Commissioners, the Financial Regulator or other people who the Minister specifies.

Consumer protection

Unfair commercial practices

The EU Unfair Commercial Practices Directive (Directive 2005/28/EC of 11 May 2005) deals with unfair business-to-consumer commercial practices, (it does not apply to dealings between businesses). The Consumer Protection Act 2007 provides for its implementation in Ireland.

The Act provides that a range of unfair, misleading and aggressive trading practices are banned if they would be likely to cause appreciable impairment of the average consumer's ability to make an informed choice in relation to the product concerned and would cause the average consumer to make a decision about a transaction that they would not otherwise make. Practices are banned, therefore, if they meet two conditions:

1. They are unfair, misleading or aggressive
2. They are likely to impair your consumer's choice

The Act also provides that certain practices are always banned - these do not have to meet the second condition. There is more information on unfair commercial practices here.

Price display regulations

The Consumer Protection Act 2007 gives the Minister the power to make Regulations requiring that the prices of certain products be displayed in a specific manner. For example, they could provide that prices of certain products must be displayed inclusive of charges, fees and taxes.

Price controls

The Prices Acts 1958-1972 gave the Minister for Enterprise, Trade and Employment a range of powers to set maximum prices. The Act repeals all of these powers except the power to control prices in emergency situations. It provides that the power to control prices in emergency situations must be exercised by the government and not the Minister.

Pyramid selling

The Pyramid Selling Act 1980 was repealed by the Consumer Protection Act 2007 and replaced by new provisions. These provisions ban participation in pyramid schemes and inducing others to participate.  They also ban the  establishment, operation or promotion of these schemes and increase the penalties for breaking the law. The new penalties for offences relating to pyramid schemes involve a fine of up to €150,000 and a prison term of up to five years.

Codes of practice

The Consumer Protection Act 2007 provides for the recognition of codes of practice drawn up by traders or groups of traders and for the NCA to approve such codes. It also provides that the NCA may issue guidelines to traders about consumer protection and welfare, commercial practices, quality assurance schemes and codes of practice.

Casual trading licences

The Act gives power to the Minister to introduce statutory guidelines for local authorities in regard to the issuing of casual trading licences. Non-statutory guidelines were issued to local authorities in July 2005 and again in July 2006 with a view to their being implemented on a voluntary basis. If this does not prove satisfactory, the Minister intends to introduce statutory guidelines.

Enforcement

Previously, the Office of the Director of Consumer Affairs could either try to get voluntary compliance with consumer legislation or take legal action. In the case of misleading practices, the Director could apply to the High Court for an injunction. The Consumer Protection Act 2007 provides for some other enforcement mechanisms to be available to the NCA.

If the NCA considers that there is a case for looking for an injunction or a prohibition order against a trader, it may (as a first step) accept a written undertaking from the trader containing whatever terms and conditions the NCA thinks are appropriate. If the trader fails to comply with the undertaking, then the NCA may look for a prohibition order.

The NCA may serve a compliance notice on a trader whom it considers to have engaged in a prohibited activity. The trader has 14 days in which to appeal the notice. If the trader fails to comply, the NCA may take criminal proceedings.

The NCA has the power to impose on-the-spot penalties for offences relating to the display of prices.

It is also required to keep a Consumer Protection List and to publish this list at any time and in any form it considers appropriate. This is a list of traders convicted of criminal offences, subject to court orders, bound by an undertaking, served with a compliance notice, or subject to a fixed payment notice.

The NCA may apply to the courts for an order requiring a trader who has been convicted of a number of specified offences to publish, at his or her expense, a corrective statement in respect of the facts relating to the offence.

Role of the Financial Regulator

The Financial Regulator (Irish Financial Services Regulatory Authority) has a role in enforcing the provisions of the Consumer Protection Act 2007 in the financial services area. The NCA and the Financial Regulator are required to have a co-operation agreement setting out their respective roles.

Whistleblowers

The Act provides protection for people who report breaches of the legislation to the NCA.

Redress for individual consumers

Anyone, including the NCA, may apply to the Circuit Court or the High Court for an order prohibiting any practice (with some small exceptions) which is unlawful under the Consumer Protection Act 2007. If an individual takes such an action, notice must be given to the trader and to the NCA. It is not necessary to show loss or damage as a result of the trader's actions.

If a trader is convicted of an offence under the Act, it is open to the court to require the trader to pay damages to a consumer who has suffered loss as a result of the trader's actions. Such a compensation order may be instead of, or in addition to, any fine or penalty the court imposes on the trader.

Consumers who are aggrieved by a prohibited act or practice may sue the trader for damages.

Penalties

The Act provides for a range of penalties for the various offences. The maximum fine for a first offence is €3,000 for summary convictions and €60,000 for convictions on indictment. There are higher fines for repeat offenders.

Contacts

Further information on unfair commercial practices is available under an EU initiative at http://www.isitfair.eu/

Further information on the Consumer Protection Act is available from the following: